August 27, 2000 Complete Niche

Volume 3 | Issue 5

Workhorse Custom Chassis achieved immediate success. Its formula? Focus on niche markets and quickly respond to changing customer needs.

It’s the can-do attitude that is evident in this company with a remarkable start-up history. The company, born of nimble, quick-thinking and resourceful determination, still thrives on these hallmark attributes. Meet Workhorse Custom Chassis of Union City, Ind., which can boast that its state-of-the-art, 209,000-square-foot manufacturing plant is the largest strip chassis manufacturing facility in the world. The company’s expected revenues of about $350 million this year, after less than one-and-a-half years in business, is credited to the Workhorse philosophy of focusing on its niche markets: walk-in vans, recreational vehicles and school buses.Andrew Taitz, the principal owner of Workhorse, recognized an opportunity and quickly made his dream a reality when he purchased the assets of the General Motors P-Chassis Division (the auto giant’s light truck and motor home strip chassis unit). Barely had the ink dried on that deal when Workhorse actually began operating. How did they accomplish this feat?

“The start-up occurred within two months,” says Tom Frey, president. “Andrew Taitz bought the rights for the business on Jan. 8, 1999, and by March 1 we were in operation.” During this short time frame, Taitz and his associates had to recruit a work force, they had to build the 209,000-square-foot plant and they had to move and relocate all the machinery and equipment to run the assembly line.

“Then we had to train a few hundred people,” continues Frey. “We also had to sign up distributors and, over the next few months, we had to get our ERP (enterprise resource planning) system running.” They did all of that in eight months flat.

All a Chassis Needs

“Envision a truck chassis with no body on it,” says Tony Monda, director of marketing. “We build the frame and all the ‘rolling’ componentry, including the power train, the rear end, the transmission and drive shaft. We sell our chassis to third parties which build Class A motor homes, step vans or school buses.

“We are a niche-focused company and we listen to our customers,” he continues. “Workhorse conducts dealer counsels to tap into what they and their customers want in their vehicles. Their input is key to how we develop programs.”

The company’s sister company, Union City Body Company, is the oldest body company in the world today, having been operating for 101 years. This company builds walk-in vans on Workhorse chassis. The two other companies building truck bodies onto Workhorse chassis are Grumman Olson and Utilimaster.

Frey cites two key elements to the success of the company, which now employs 350 dedicated people. “The most important is niche focus,” he says. Although larger auto makers manufacture within these markets, it accounts for less than 1 percent of their total business. “So it’s difficult for them to make sense of the intense focus required for long-term product development in these very small business segments for them.”

The second key is that Workhorse is a private entrepreneurial company. “Although there are many strengths in being a large corporation, they have to deal with many partners when they want to take action,” continues Frey. “We are less constrained and can move quickly.”

Power Products

Workhorse’s 2001 model year begins Aug. 7, 2000, and the company plans the launch of two new RV products. “Third-party data shows these products outperform the competition hands down in total performance, acceleration and fuel economy,” says Monda.

“We will integrate into our RV chassis the GM Vortec 8100, 8.1 liter, 330-horsepower V-8 engine, which is the largest and the most powerful gasoline engine available,” he continues. “We will have the most powerful gasoline RV power train in the world today.”

“This Vortec 8100 replaces the GM 7.4- liter engine and will be standard in our motor home chassis,” explains Frey. “This is, by far, the biggest displacement gas engine with the highest torque capability in the industry.”

“GM was able to design a more powerful engine while making it more fuel-efficient,” explains Monda. “Typically you have to sacrifice fuel economy for power, but now you won’t have to with our ultrahigh-tech performance package.”

The new chassis integrating this new engine is Workhorse’s P-32 motor home chassis. “It delivers handling advantages because of the exclusive wide-track independent front suspension system, which no other gas RV chassis manufacturer offers,” says Monda. The 22,000-pound gross vehicle weight (GVW) gas chassis is the largest in the industry, with a frame structure designed for durability.

Nimble Response

As consumers demanded bigger and bigger motor homes, the RV industry responded to that demand. “Slide-outs put extra restrictions on the chassis because the mechanisms operating these slide-outs are heavy,” explains Monda. “When we bought this P-Chassis from General Motors, their heaviest product was about a 16,500-pound GVW. We reacted to the changes in market demands and designed the 22,000-pound GVW product. It’s an exciting product.”

Workhorse has an exclusive agreement with GM as sole provider of the power train to this industry. “Our aim was structure fortitude, while also aiming to offer the same ride, handling and drive characteristics we had in place with our traditional lines,” says Monda.

It’s a fact of life. People nowadays are not prone to mechanical tinkering as they were a few generations back. “Baby boomers don’t fix things themselves,” says Monda. “And the RV scenario is difficult when it comes to service.” To get an RV repaired on a warranty, you used to have to take it to one place for the chassis and to another for the body. Now, however, Workhorse’s one-stop warranty service offers both body and chassis repairs in certified Workhorse dealerships. “We want to be the best total-value supplier to our customers,” says Monda. “We are a niche player and we have to respond like one.”

On the FasTrack

Workhorse just launched its first integrated vehicle program, called FasTrack, within its commercial niche market. This means that Workhorse will supply the body and the chassis, or a finished product, to the marketplace. “This is important because before, when you ordered a step van from your local truck dealer, it involved a 12-week process for the dealer and the customer. First, the dealer would have to order the chassis from a chassis manufacturer. Then he would order a body from a body manufacturer. The chassis manufacturer would have to ship the desired chassis to the body manufacturer, who would then have to build it. The finished vehicle was then shipped to the dealer and finally sold to the customer.

“Customers don’t want to wait that long,” says Monda. “Our program streamlines that process.” Workhorse set a new industry standard in turnaround time for these deliveries, achieving a 66 percent reduction in wait time at the customer level. “We can bring the finished vehicle to the shipper in four weeks after receipt of an order. Now there is only one manufacturer, one invoice, one warranty and one person to deal with. It takes the hassle out of the ownership experience.”

Internet Speed

If there is one distinction that can be made about Workhorse, it has to be its quick and precise response to opportunity, the marketplace and to its customers. “We move like an Internet company,” says Monda. “And that shows in how we built this business so fast. When we built the first chassis, we had to literally pull it down the line – in a building without a roof! We focus on our No. 1 objective, which is our customers’ needs.”

“We continue to do things in record time,” adds Frey. “We introduced our first new product innovations in about six months, and we continue to have less-than-one-year lead times to introduce new products, compared to an industry cycle of more than double that.”

“We don’t make SUVs, and we don’t make cars,” says Monda. “We are very focused on our niche markets.” The goal of Workhorse is to be the chassis of choice. “We will achieve this by analyzing the market and bringing the right products at the right price to the market at the right time.” A tall order? Not at all.

“And we have to do one other thing, and that is to be the company that takes care of the customer after the sale,” adds Monda. “The little ma-and-pa customer who buys a $150,000 motor home doesn’t mean a whole lot to some of our larger competitors. But to us, they are our bread and butter and we will always be responsive to their needs.” Workhorse even offers 24-hour roadside assistance to make the travel experience a bit more pleasant.

What’s in store for the company down the road? “We will always be expanding,” says Monda. “Without giving away the company secrets, you will see us playing in more and more aspects of this truck market as we grow either through acquisitions or planned product launches.”

“We will be a truck supplier dedicated to being focused on specialty niche markets that demand product innovation and swift response so that we can be the best supplier to customers in those niche markets,” concludes Frey.

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